Ibm case study strategic management

Minicase Dynamic Capabilities at IBM “You make the right decision for the long run. You manage for the long run, and you continue to move to higher value. That’s what I think my job is.”1 Virginia Rometty, IBM chief executive officer. ©JEWEL SAMAD/AFP/Getty Images LED BY CEO Virginia Rometty, the IBM of today is an agile and nimble IT services company. Rometty was promoted to CEO in 2012 from her position as senior vice president of sales, marketing, and strategy. Rather than facing just one technological transformation, IBM and its clients are currently facing three disruptions at once: 1. Cloud computing: By providing convenient, on-demand network access to shared computing resources such as networks, servers, storage, applications, and services, IBM attempts to put itself at the front of a trend now readily apparent in services that include Google Drive, Dropbox, or Microsoft 365. Increasingly, businesses are renting computer services rather than owning hardware and software and running their own networks. One of the largest cloud-computing providers for businesses is Amazon Web Services (AWS), which beat out IBM in winning a highprofile CIA contract. This was seen as a major embarrassment given IBM’s long history of federal contracts. Microsoft with its Azure cloud offering is another potent competitor, especially after CEO Satya Nadella focused Microsoft on a “cloud first, mobile first” strategy. 2. Systems of engagement: IBM now helps businesses with their systems of engagement, a term the company uses broadly to cover the transition from enterprise systems to decentralized systems or mobility. IBM identifies the traditional enterprise system as a “system of record” that passively provides information to the enterprise’s knowledge workers. It contrasts that with systems of engagement that provide mobile computing platforms, often including social media apps such as Facebook or Twitter, that promote rapid and active collaboration. To drive adoption of mobile computing for business, IBM partnered with Apple to provide business productivity apps on Apple devices. 3. Big data and analytics: IBM now offers smarter analytics solutions that focus on how to acquire, process, store, manage, analyze, and visualize data arriving at high volume, velocity, and variety. Prime applications are in finance, medicine, law, and many other professional fields relying on deep domain expertise within fast-moving environments. IBM partnered with Twitter to provide IBM’s business clients big data and analytics solutions in real time based on the vast amount of data produced on Twitter. IBM’s Core Competency: Providing Solutions At its core, IBM is a solutions company. It solves data-based problems for its business clients, but the technology and problems both change over time. As an example, Page 467 IBM helped kick-start the PC revolution in 1981 by setting an open standard in the computer industry with the introduction of the IBM PC running on an Intel 8088 chip and a Microsoft operating system (MSDOS). Ironically, in the years following, IBM nearly vanished after experiencing the full force of that revolution, because its executives believed that the future of computing lay in mainframes and minicomputers that would be produced by fully integrated companies. However, with an open standard in personal computing, the entire industry value chain disintegrated, and many new firms entered its different stages. This led to a strategic misfit for IBM, which resulted in a competitive disadvantage. Rather than breaking up IBM into independent businesses, Lou Gerstner, installed as CEO in 1993, refocused the company on satisfying market needs, which demanded sophisticated IT services. Keeping IBM together as one entity allowed Gerstner to integrate hardware,